Friday, February 19, 2010

Press and Burn: Do shiny CD's matter?

Do CD's matter?

I've been asking this question of both professionals and fans, and as of right now, it's pretty evenly split.

Just about anyone under 30 seems to prefer digital versions of content, whereas people over 40 seem to exclusively prefer CD's.

From a monetary perspective, most CD's are a net-loss for producers: they're most commonly used as "hooks" to get people to purchase higher-margin schwag. Some artists I'm acquainted with have moved to a pay-what-you-want model for their CD's, a move that recognizes the inherent decline in perceived value on the part of fans.

But here's where it gets interesting and a bit non-intuitive: when asked to name their own price, most fans opt to OVER-pay: they'll sooner volunteer a higher price when given the option. Why?

I think it has to do with the psychology of what marketers call a "value proposition." When we as consumers are confronted with an item and its associated price, our natural instinct is to evaluate the value proposition: is this price too high for what I think I'm getting? Can I obtain it at a better price? Is this price even fair from a market perspective (information asymmetry)? There are probably hundreds more questions that consumers deal with before committing to a purchase.

But a PWYW model obliterates this psychological obstacle. When asked to pay what you want, your value methodology inverts: instead of deciding whether or not a predetermined price is too high/low, a potential customer is faced with a different set of motivators: social pressure to support an artist by paying *something*, a desire to retain the affections of the performer (closer bond between artist & fans), and above all, a sense of having *contributed* to the net worth of the artist, versus feeling exploited by them.

So if you're an artist who's fanbase is in their late thirties onward, chances are you're going to want plenty of shiny discs for that demographic. And with those discs come a new opportunity to create viable income.

Genres of music that appeal to younger fans, however, may find it difficult at first to monetize that fanbase. Downloads as promotional giveaways are one model, provided you've got something else to get fans interested, but I wouldn't look to the download model for reliable income. There are huge psychological factors at play when it comes to product tangibility.

This post opened with the question "Do CD's matter?" For some artists, the answer is a clear "yes." For others, however, CD's may not play a central role in the establishment of an artist's presence.

Addendum: While writing this post, I witnessed a couple at a nearby table downloading something onto a mobile phone (non-iPhone). The frustration level was evident. I'm willing to bet this person would have just sooner plopped down $5 for a CD copy of whatever they were trying to obtain. Again, the value proposition is: the CD is *far* less frustrating than non-intuitive download services with spotty success.

Wednesday, February 10, 2010

Why do social networking sites hide the logout button?

Facebook (and some other sites I use) recently "updated" its user interface. One of the changes was to "hide" the "Logout" button under a new dropdown menu. (A couple other sites have either done the same or relegated the logout button to another page entirely.) This decision is deliberate. Facebook wants as much of your online behavioral data as they can get. And governments want that data, too.

By hiding the logout feature, you're more apt to simply close the browser or tab, but effectively remaining logged into a service. This allows Facebook to openly track your online whereabouts via advertising partnerships that all report back to Facebook (a couple years ago, they called this "BEACON.")

A potential solution is Ipredator, an encrypted proxy from The Pirate Bay. I'm not sure how long this service will remain viable (the U.S. could simply shut off access at whimsy), but for the short term, it's an easy way to remove yourself from the trackable net. This is probably a good thing.